KENYA: A New horizon

As the economic engine of East Africa, Kenya continues to offer a great deal of opportunity to Chinese investors, just as the Kenyan economy also stands to benefit from new Chinese FDI; In July, the World Bank stated that the Kenyan economy was still operating below potential, and that, “Foreign Direct Investment is key to [its] development agenda.” A $5 billion deal for a railway line and energy project signed in August between China’s President Xi Jinping and Kenya’s newly elected President Uhuru Kenyatta reaffirmed the latter’s campaign pledge to strengthen ties with the East and underscored Kenya’s continued openness to Chinese investment. President Xi said that China was also exploring other areas of investment, and that President Kenyatta’s “vigour” would lead the country to “greater accomplishments.”

Experts agree that the time is ripe for growth in Kenya. Last December, Standard & Poor’s gave the country a B+ long term rating, predicting investment and growth acceleration if the 2013 election was free of violence. Indeed, Kenya’s growth jumped to 5.2 percent in the first quarter of 2013, compared with 3.9 percent in the same period last year, largely due to the peaceful elections and smooth transition that ushered in President Kenyatta this past March. In its July report, the World Bank said the Kenyan economy “could be in a position for a take-off,” and predicted GDP growth of 5.7 percent this year, and 6 percent in 2014.